Area legislators oppose Quinn plans for pensions, Medicaid

Illinois legislators who represent the Springfield area say they are opposed to the major components of Gov. Pat Quinn’s proposals to overhaul the state’s Medicaid and pension systems, including his plan to raise the cigarette tax to prop up Medicaid.

By CHRIS WETTERICH

The State Journal-Register

By CHRIS WETTERICH

Posted May. 1, 2012 at 12:01 AM
Updated May 1, 2012 at 12:04 AM

By CHRIS WETTERICH

Posted May 1, 2012 at 12:01 AM
Updated May 1, 2012 at 12:04 AM

Illinois legislators who represent the Springfield area say they are opposed to the major components of Gov. Pat Quinn’s proposals to overhaul the state’s Medicaid and pension systems, including his plan to raise the cigarette tax to prop up Medicaid.

State Sen. Larry Bomke, R-Springfield, and state Reps. Rich Brauer, R-Petersburg, Raymond Poe, R-Springfield and Wayne Rosenthal, R-Morrisonville, all oppose raising the cigarette tax. Quinn has proposed raising the tax in order to help deal with a $2.7 billion shortfall in the program.

The four lawmakers also oppose the governor’s pension plan, which calls for the retirement age for full pension benefits to be raised to 67, for cost-of-living increases to be cut to the lesser of 3 percent or the consumer-price index, and a 3 percentage point increase in how much employees contribute to their pensions. The plan would apply to all state workers who have not yet retired and who began work prior to Jan. 1, 2011. Quinn believes it would save between $65 billion and $85 billion.

Other members of the delegation – state Sen. Sam McCann, R-Carlinville, state Sen. John Sullivan, D-Rushville and state Rep. Jim Watson, R-Jacksonville -- did not return phone calls seeking comment Monday.

Rosenthal objected to the proposed cigarette tax increase because it is not a cut in Medicaid spending. In his February budget address, Quinn called for a $2.7 billion cut.

“If he wants to do that separately or in addition, we can talk about that,” Rosenthal said.

“I think we have taxed that segment too much,” said Bomke of taxing smokers more. He acknowledged voting for a cigarette tax increase under GOP Gov. George Ryan.

Identify ineligible recipients

Quinn wants to raise the tax from 98 cents to $1.98, saying that the new revenue will bring in matching money from the federal government and lead to more people to quit smoking. He noted that Illinois’ cigarette tax is 32nd in the nation.

The lawmakers said Medicaid reform should consist only of kicking people off of it, particularly those who are not eligible. While they don’t know how much can be saved, they believe there is rampant fraud and that many ineligible recipients continue to receive benefits because the state doesn’t do enough to find out who is ineligible.

The state once had a policy of “passive redetermination,” in which it wrote recipients to ask whether they were still eligible for coverage. If they wrote back and said no, they were removed from the Medicaid rolls. If they didn’t write back, they stayed.

In a recent meeting with The State Journal-Register editorial board, Quinn and his budget director, Jerry Stermer, were asked whether that wsa still the practice.

Page 2 of 3 - Under the last round of Medicaid reform passed in 2011, recipients must provide proof of Illinois residency and documentation of at least one month's income. That plan was declared too onerous by the federal government, which asked that the administration use electronic records to determine eligibility.

“I think we need to use every tool we have on fraud abuse or just plain old mistakes,” Quinn said. “We had some, I guess air turbulence, for a little while from the feds, but we’ve resolved that with them,”

Bomke said he might be able to consider a cigarette tax increase if the money were earmarked to pay the billions owed to Medicaid providers, such as St. John’s Hospital and Memorial Medical Center

“If it’s going to go to subsidize people that are on Medicaid that shouldn’t be on Medicaid, I could not,” Bomke said of voting for a tax hike. “We need to do a better job thinning out people who are on Medicaid.”

The four lawmakers also oppose reducing Medicaid reimbursement rates to hospitals, another plank in Quinn’s proposal.

“How are they going to survive without getting those rates?” Poe said.

Could miss goal

But Poe acknowledged that the legislature may not be able to meet the $2.7 billion goal for savings if it looks only at eligibility.

“It might take two to three years,” he said.

As for the governor’s pension plan, the four lawmakers echoed public employees’ contention that the state is to blame for underfunding the systems -- but offered few solutions.

Brauer said the state needs to see how much it can save in Medicaid first.

“They’ve used that thing as a credit card,” Brauer said of the pension system. “Now you want to punish those people (employees) who put the money in.”

Asked whether he had considered introducing a pension bill himself, Brauer said, “No I haven’t.”

Rosenthal said Quinn should reduce pension benefits for his staff first.

“It’s really tough to ask other people to do it rather than do it yourself,” Rosenthal said.

But he said he might back some changes, including raising the retirement age and cutting back on incentives allowing certain public employees to retire before others.

“The hard part is paying for the hospitalization (medical care) for 10-15 years after they retire from the state before they’re eligible for Medicare,” Rosenthal said.

Refinance pensions?

Poe said he might consider voting to raise the retirement age to 62 instead of 67. But he worried that older workers won’t retire, increasing the state’s costs and preventing younger people from finding state employment.

Page 3 of 3 - “That last five years, you’re paying people way more than you’re paying the first five years,” Poe said.

Bomke said the pension system might have to be refinanced like a mortgage, giving the state more time to pay off its $83 billion in accumulated debt. He said he might also favor increasing employee contributions.

Current law calls for the systems for teachers, state workers, lawmakers, judges and university employees to be 90 percent funded by 2045. Quinn estimated that there is about $310 billion in obligations for past, current and future state workers and that his plan will achieve 100 percent funding by 2042.

“There’s no question it’s got to be dealt with,” Bomke said. “I don’t know what the answer is. We’re stck on 2045. Maybe you extend another 40 years to 2085.”

Chris Wetterich can be reached at 788-1523. Staff writer David Thomas contributed to this report.